dandy
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Post by dandy on May 18, 2017 9:43:29 GMT
Hi I was hoping any of you could help me with this
If a close friend/relative of yours said they wanted to invest £100,000 in P2P but
1. only via one platform
2. wants the lowest risk subject to 3 below
3. expected returns must be a minimum of inflation+
4. does not want to have to manage it at all
5. they would want to access their funds in full ideally after 2 years but no longer than 3 years at no cost
, to buy a new home
where should I suggest to get closest to this?
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bg
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Post by bg on May 18, 2017 9:47:03 GMT
I would suggest Asset Capital's 30 day access account which currently pays 4.75%
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SteveT
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Post by SteveT on May 18, 2017 9:49:18 GMT
I would tell them their situation is entirely unsuited to P2P lending. If they need the money to buy a house in 2 to 3 years' time then gambling it on P2P loans, even at the lower risk end of the spectrum, would be foolhardy.
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dandy
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Post by dandy on May 18, 2017 9:53:07 GMT
I would tell them their situation is entirely unsuited to P2P lending. If they need the money to buy a house in 2 to 3 years' time then gambling it on P2P loans, even at the lower risk end of the spectrum, would be foolhardy. I tend to agree to a point. But the alternative of an FSCS bank account is a guaranteed loss of ~ 2.5% annually.
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SteveT
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Post by SteveT on May 18, 2017 10:00:22 GMT
I appreciate that, but conversely nothing is guaranteed in the P2P world. If they are determined to proceed, make sure they fully understand and accept the risk that the entire P2P lending market could be utterly transformed in that timescale and their money might end up locked in for many years if the platform they choose hits serious problems.
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Post by Butch Cassidy on May 18, 2017 10:02:16 GMT
Both Col & MT have loans that typically run for 6 month periods & pay 12% both with currently liquid SM's but no certainty this will continue; so you could easily target say 10%pa return, with only a relatively small amount of DD every few months, then invest for term & then in say 18 months withdraw & stick it under the bed, depends how urgent & exact their deadline is but as has been pointed out double digit returns DO NOT COME WITHOUT RISK.
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pikestaff
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Post by pikestaff on May 18, 2017 10:06:10 GMT
I would tell them their situation is entirely unsuited to P2P lending. If they need the money to buy a house in 2 to 3 years' time then gambling it on P2P loans, even at the lower risk end of the spectrum, would be foolhardy. I tend to agree to a point. But the alternative of an FSCS bank account is a guaranteed loss of ~ 2.5% annually. I think the risk of a significant loss is small at the lower risk end of the spectrum (eg AC 30 day or RS rolling). The bigger risk is that something happens to hit confidence, as a result of which liquidity dries up and the friend is locked in for an indeterminate period.
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Greenwood2
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Post by Greenwood2 on May 18, 2017 10:10:50 GMT
Why not buy now a house now? The £100,000 isn't going to increase by that much over two years and house prices may go up more.
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dandy
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Post by dandy on May 18, 2017 10:14:27 GMT
Why not buy now a house now? The £100,000 isn't going to increase by that much over two years and house prices may go up more. I think he is not sure where he will be located long term just yet, it may not even be in the UK depending on brexit outcome
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Post by newlender on May 18, 2017 10:55:25 GMT
£100K into one platform would be madness. Even Zopa, usually considered the most stable, is seeing defaults in its non-safeguarded product. I'd go for Premium Bonds - you never know!
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angrysaveruk
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Post by angrysaveruk on May 18, 2017 11:38:53 GMT
I have 25% of my personal wealth split between Zopa and Assetz Capital. At one time I had a sizable investment with Ratesetter but I didnt like their move into non transparent lending to companies. If I had to select one of these I would put my money with Assetz Capital - in an economic armageddon scenario I would rather have secured loans. My biggest concern has always been the platform itself collapsing leading to problems collecting loans etc etc. I cant see this happening over the next 12 months with the ISAs bringing a flood of cash into the sector - especially the larger better run players.
Note this is not investment advice I am not an investment professional and it just my uneducated opinion based on common sense.
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archie
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Post by archie on May 18, 2017 11:40:18 GMT
BondMason may be suitable. Not particularly low risk but spread across several platforms.
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Greenwood2
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Post by Greenwood2 on May 18, 2017 12:13:40 GMT
I have 25% of my personal wealth split between Zopa and Assetz Capital. At one time I had a sizable investment with Ratesetter but I didnt like their move into non transparent lending to companies. If I had to select one of these I would put my money with Assetz Capital - in an economic armageddon scenario I would rather have secured loans. My biggest concern has always been the platform itself collapsing leading to problems collecting loans etc etc. I cant see this happening over the next 12 months with the ISAs bringing a flood of cash into the sector - especially the larger better run players. Zopa did survive the last downturn (2008/2009) and although returns did go down as far as I'm aware no one made a loss.
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angrysaveruk
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Post by angrysaveruk on May 18, 2017 12:59:43 GMT
Zopa did survive the last downturn (2008/2009) and although returns did go down as far as I'm aware no one made a loss. Zopa have a good track record although one of my personal concerns is the volume of car loans they seem to be giving out to higher risk borrowers. Secured lending is less risky imo as long as it is done correctly.
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Post by davee39 on May 18, 2017 13:11:47 GMT
P2P is not a good idea if the £100k is the entire asset.
My P2P portfolio is based on the following
1) Zopa - Long track record, moving towards Banking Licence so subject to more FCA scrutiny, unfortunately NOT available to new customers.
2) Assetz Quick Access / 30 day - Benefits from a transparent model - these accounts have cash support to allow access in difficult conditions, protected by a provision fund but could be restricted access at times of crisis.
3) Octopus choice - The strongest platform due to the huge resources of the owning business. Money needs drip feeding to improve diversification. Max 75% LTV, usually 60%, on property likely to be easily marketable. Some cash always likely to be unavailable on demand - loans are frozen for withdrawal if payments are late.
I am not keen on RS and am slowly running down as my 5.9% 5yr loans pay off. Very opaque background mechanics between market matching and the use of the rolling market. Substantial reductions, redefinition's, accounting fiddles relating to provision fund coverage.
It goes without saying that anyone who suggests FC, should be smacked very hard until they come to their senses.
Then there are all the super 12%+ platforms which have many keen, eager and loyal fans training their fast fingers. I see these as last resort lenders for desperate borrowers. They are not for me, and are certainly not low risk.
I have reached my personal limit on P2P so am looking elsewhere. I am currently breaking even on P2P Global investment trust as it has recovered from a fall to a sharp 24% discount. Now at a 14% discount and 5% yield. I see the discount narrowing further and the yield improving as the managers re balance away from the US. I am also looking at corporate bond funds to protect my stock market gains, there are index linked funds which could be valuable when inflation reaches 4%. (MY own investment ideas - not advice)
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